Safety of Credit Card Offers in the Mail

Credit card companies may send you pre-approved offers.

Credit card companies will seek you out if you handle your finances responsibly. Your mailbox will be stuffed with offers enticing you to open new accounts. They may have some good benefits, such as low interest rates, reward points or even a 0 percent introductory offer. This is convenient if you are seeking a new credit card, but it can also pose a safety risk.

Definition

Your credit report contains information about how you use credit and whether you pay accounts promptly. A good report makes you attractive to credit card companies and other lenders. They can purchase limited information about you from Equifax, Experian and TransUnion, which are the three main credit reporting agencies. Credit card companies may send you a pre-approval offer in the mail if you meet certain criteria. You can claim the card by providing some simple information, signing the forms and sending them in or by redeeming the offer over the Internet.

Risk

Pre-approved credit card offers can make you vulnerable to identity theft. Many people don't have locking mailboxes so a thief can easily steal your mail if you are not around when it is delivered. He can attempt to claim your pre-approved credit card by sending in the paperwork and stealing it when it arrives in your mail or requesting the company send it to a different address. Most credit card companies will not do this, but some may fall for the thief's story that you have moved. Criminals can also get pre-approved credit card offers from your trash if you do not thoroughly destroy them by shredding.

Effects

Your credit history will be affected if a thief manages to get your pre-approved credit card from your mail. He will typically run up as many charges as possible before you discover the theft. This can take some time because you do not know the card exists. The thief can intercept the bills and will usually have at least two billing cycles to spend up to the credit limit before the bank realizes you are not paying and freezes the account. The missed payments will show up on your credit reports, pulling down your credit score. The bank will initially try to collect payment from you until you realize you're a fraud victim and report it to the card issuer and credit reporting agencies.

Prevention

You can protect yourself from thieves stealing your mailed credit card offers by purchasing a locking mailbox. Check your mail promptly after it's delivered. The longer you wait, the more time a criminal has to steal pre-approved offers. Check your credit reports regularly to detect unusual accounts. You are entitled to a free annual copy from each credit reporting agency if you order them from AnnualCreditReport.com. Order one every four months to cover the entire year.

Solution

You won't have to worry about prevention if you stop banks from sending you pre-approved credit card offers in the mail. The Fair Credit Reporting Act, a federal law, lets you tell the credit reporting agencies to stop selling your information for commercial purposes. You can do this online by logging into OptOutPrescreen.com. The Federal Trade Commission advises it may take up to 60 days for offers to stop arriving once you complete the opt out process.

References

• Federal Trade Commission: Prescreened Offers of Credit and Insurance
• Federal Trade Commission: Free Annual Credit Reports
• Credit Infocenter: How to Prevent the Credit Bureaus From Selling Your Name

Resources

• Opt Out Prescreen
• Annual Credit Reports